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A Great Mind is a Tough Thing to Finance

If you want a peek into the financial life of a financial writer (read: me), check out the most recent issue of BusinessWeek. Shameless self-promotion? Well, I do provide a service to readers. For the story, I tested Vanguard Group’s revamped financial planning service. While my own Vanguard financial plan focused on retirement, our planner also spent some time dealing with our college savings, or lack thereof. By Vanguard’s estimate, we’ll need to sock away more than $5,000 per year to put our toddler Leo through Yale in 2022.

How will my husband and I stash away that much cash while saving for our own retirement (as well as a new home)? I don’t know. But at least I’m trying. Since I had the Vanguard plan done, I've opened a New York State 529 College Savings Account for Leo, and I’m having $100 taken out of my bank account each month.

I’m a big fan of 529s. In New York, where we live, our contributions are tax deductible. More important is that 529s make great gifts for kids. In fact, I put $50 each quarter into the 529 accounts I opened for our four nieces and nephews. These contributions are made in lieu of another molded plastic toy or Barbie doll for holidays and birthdays. One of the best websites out there for information on 529s, incidentally, is savingforcollege.com

The New York Times ran a great piece last week about parents who saved money for college, only to find that their kids had higher-priced education aspirations—in one case, parents had pre-paid tuition for their daughter to attend a Florida state school, but the kid wanted to go to a private university.

Do you have any tips on building up a college fund for Junior while managing to pay the bills and put something away for your own retirement?